What is CRM and what does it mean to nonprofits?

For the past couple of years, I’ve been hyper-focused on CRM. Changes in the technology landscape and nonprofits’ engagement with their constituents have converged to present exciting opportunities to effectively meet the needs of contemporary nonprofits via CRM. But what is CRM? Three simple letters but often a Pandora’s box full of responses when you start asking. However, I am willing to take a swing at it.

First, the basics. In the nonprofit sector we talk about “Constituent Relationship Management” (in the commercial sector it’s about Customers). To dig deeper, I’ll pull on our firm’s experience designing and implementing CRM environments at many nonprofits large and small, and our conversations with many more organizations. For our 2012 white paper “Insights into Nonprofit CRM” , we interviewed CIOs at 30 of the largest nonprofits in the country. In the course of these conversations, three definitions for CRM emerged: CRM as a System, Service and Strategy.

We’ve since conducted further investigation and found that for many, “CRM as a system” really means “CRM as a software”. So we now categorize CRM definitions into two basic categories: Engagement Approach and Technology Solutions. In the end, every organization needs to orient in both categories. How you intend to engage with your constituents will define what you need of your technology solutions. (Too often how nonprofits engage is defined for them by their limited technology. Sorry if that sounds familiar…)

Before we dive into the definitions, here’s an illustration:

CRM as Software

A single piece of software that holds all data and manages all business practices.

Ask most folks “What’s CRM?” and they’ll say “a single piece of software that holds all our constituent information and manages all our business practices”. Everybody would like that; it’s a “silver bullet” solution to our siloed-data and legacy-software problems. Unfortunately, it’s not realistic for most organizations. The smallest and simplest may find a specialized system that meets their needs, but most organizations will need something more. Most organizations will need:

CRM as System

Multiple pieces of software working in coordination with business practices to manage information and meet key business needs. Includes integrations, business intelligence tools and data warehouse solutions.

This is more sophisticated, but it’s frankly what most organizations need. CRM as System means multiple pieces of software working in coordination with business practices to manage information and meet key business needs. For organizations with more complex needs it can include integrations, business intelligence tools and data warehouse solutions. This environment allows organizations to adapt their system as their strategies change.

On the surface, having multiple systems can sound frighteningly like one’s current software environment. But there’s a key difference – planning. The correct implementation of CRM includes upfront planning and the recognition that all good systems require ongoing attention. When approached from that perspective, CRM as a System rewards with flexibility and power.

CRM as Service

Re-actively meeting the requests of constituents for information and/or services.

Focusing on improving the “customer service” experience that constituents have with your organization is a worthy aim. For many organizations, this is an excellent goal (though perhaps an interim one, see below). And it can often be met with a simpler technology solution – CRM as Software. However, over the longer-term, there are inherent limits to this approach. It is re-active to one’s constituents, not pro-active. Interactions are driven primarily by the constituent, and the organization tends to engage only those constituents who initiate contact. The organization ends up in a passive position with limited influence. Additionally, this approach typically involves fewer organization staff – those charged with responding to requests for information or services – resulting in missed opportunities to engage the entire organization in interacting with constituents. However, CRM as Customer Service can be a substantial improvement over current conditions. Adopting the requisite technology, business practices and internal and external communications can yield considerable near-term benefits and lay the foundation for the longer-term adoption of…

CRM as Strategy

Pro-actively engaging constituents where they already “congregate / reside” to expand the reach and delivery of the organization’s mission.

CRM as Strategy offers the ultimate opportunity and return-on-investment for organizations adopting CRM. As such, a strategy should be the ultimate goal, whether in the near- or long-term, for organizations. This approach includes CRM as Customer Service but goes further as many interactions are initiated and driven by the organization. Every staff person in the organization is provided guidance and support in their work to represent the organization. The depth and breadth of this organization also increases the depth and breadth of the constituent pool and the ensuing interactions. Most importantly, the organization pro-actively engages constituents where they already “congregate / reside” to expand the reach and delivery of the organization’s brand and mission. All of this allows the organization to be more adaptive, responsive, accurate and effective. It requires planning, communication and coordination within the organization and the technology – CRM as Systems – to support it. The ROI? CRM as Strategy more fully engages both internal staff and external constituents in expanding the impact of the organization’s mission.

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The Connected Cause is a place for experts in the nonprofit online space to share perspective, offer guidance and promote best practices for using today’s technology effectively. Our goal is to provide a comprehensive source of collaborative thought leadership for the nonprofit industry.

2 comments

For many years, the “secret sauce” of many fundraising and marketing gurus has been this: Put the right message, in front of the right person, at the right time, and make sure it’s in the language they understand.